Using and evaluating audit decision aids;

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Using and Evaluating Audit Decision Aids1 Robert H. Ashton
Duke University
John J. Willingham
Peat Marwick Main & Co.
This paper is intended to stimulate discussion among auditing practitioners and researchers about the use of audit decision aids. While audit decision aids have a long history, they are presently assuming greater importance as the auditing profession is in a period of transition from experience-based to research-based audit approaches. The issues raised in this paper may be of interest to auditing practitioners concerned with managing that transition, and to auditing researchers concerned with the scientific evaluation of audit decision aids.
The types of audit decision aids we discuss are designed to assist auditors in making decisions required in the collection and evaluation of evidence for the purpose of expressing an audit opinion or rendering other audit-related client services. Today's audit decision aids are based increasingly on the implications of research studies, typically rooted in disciplines other than auditing, that examine audit decision making in a controlled, rigorous manner. In saying this, we do not mean to imply that the trend toward research-based audit tools is restricted to the types of decision aids discussed in this paper, nor do we mean to suggest that this is a trend of recent origin. Consider, for example, earlier work in statistical sampling based on the disciplines of mathematics and statistics (e.g., Arkin [1957]), or in systems-based approaches to auditing which relied on the discipline of systems analysis (e.g., Skinner and Anderson [1966]).
The decision aids discussed in this paper are linked to an extensive body of research known as "human information processing" or "behavioral decision theory," which is explicitly concerned with understanding, evaluating, and improving decision making. In auditing, maintaining and improving the quality of decision making has been reinforced recently by governmental activities emphasizing audit effectiveness and by competitive pressures emphasizing audit efficiency. Proponents of decision aids based on the decision research literature maintain that audit efficiency and effectiveness can potentially be improved by employing such aids.
The paper is organized in three major sections. First, we present an
1 We are grateful to Alison Ashton, Lisa Koonce, Jim Loebbecke, Bill Messier and Ira Solomon for
comments on an earlier version of this paper.
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